Results-Driven Research for Alaskaacep.uaf.edu/media/86773/House-Energy-Committee-3-24-14-vr2.pdfSustainable Automation grid -forming inverter, Prudent Energy flow battery, Williams

Results-Driven Research for Alaska

March 26th, 2014 Gwen Holdmann, Director

Alaska Center for Energy and Power

ACEP Mission: Develop and disseminate practical, cost-effective, and innovative solutions for Alaska and beyond

Presentation Agenda ACEP program and projects examples and overview

• Diesel fuel price benchmarking • Assessment of Southeast-BC Intertie • LNG – screening assessment for rural AK communities • Private investment models for renewable energy in Alaska • Small modular nuclear reactors – update • A role for Independent Power Producers – an example from Nome • others

Working Relationships (how we do business) • State Agencies • Industry

Funding energy projects • Attracting private funding, and thoughts on the Renewable Energy

Fund and proposed Rural Capital Energy Fund • Emerging Energy Technology Fund – positioning Alaska in a global

energy economy

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ACEP Mission: Develop and disseminate practical, cost-effective, and innovative solutions for Alaska and beyond

Alaska Center for Energy and Power

Who we are: Organized 6 years ago under the Institute of Northern Engineering as ‘Gateway’ to Energy Research for UA Based at UAF with a satellite office in Anchorage 20 dedicated staff (mostly engineers) 35 affiliated faculty and 50 students

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ACEP is a revenue center, not a cost center

Alaska Center for Energy and Power

ACEP has received a total of $3.1M through UA operating budget (over 6 years) ACEP has received a total of $26M in grants and contracts during this period Where has this funding gone?

• ~40% to fund 100+ small Alaska-based businesses to support research enterprise

• ~40% to fund researchers throughout UA system (not just within ACEP)

• ~20% to fund base University operating costs ($6M)

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Role of ACEP and the University of Alaska Developing information for decision makers

o Technology testing and optimization (industry) o Energy analysis (policy makers, communities) o Data management

Preparing students to work in energy-related disciplines Commercializing energy innovation

Diesel fuel price benchmarking (Helps with comparative economic analysis)

Assessment of Southeast-BC Intertie (Report from AEA is forthcoming)

Private investment models for renewable energy in Alaska (Private money can sometimes offer better rates)

LNG screening assessment for coastal Alaska communities

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Energy Analysis Group: Examples of Ongoing Projects

Why small scale LNG now?

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$-

$5.00

$10.00

$15.00

$20.00

$25.00

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Comparative Commodity Costs, $/MMBtu

#2 Heating Oil (NY Harbor )

Natural Gas (Henry Hub )This gap can fund a lot of CapEx

Screening-Level Evaluation of LNG for Coastal PCE Communities

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Assessment framework – keeping it simple(er) • Electric utility loads only (commercially simpler) • Coastal communities (logistically simpler) • ISO containers (“plug & play”)

Can LNG work in this framework (worst case!)? • Can we get to 10,000 MMBtu/day in load (supports

favorable shipping economics)?

How big is SE & SW AK utility demand?

Small! • Insufficient to get to

10,000 MMBtu/day Total annualized demand ≈4,000 MMBtu/day • 50% of this met by 3 • 65% of this met by 6 • 75% of this met by 10 • 95% of this met by 30

(cutoff for smallest communities)

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10

$0/MMBtu

$5/MMBtu

$10/MMBtu

$15/MMBtu

$20/MMBtu

$25/MMBtu

Break-even Natural Gas Prices for Select Ice-free Communities Given FY2010 & 2012 Diesel Costs

Breakeven Range

2010 Diesel

2012 Diesel

$3.82; Average price, FY2010-FY2012

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-$20/MMBtu

-$15/MMBtu

-$10/MMBtu

-$5/MMBtu

$0/MMBtu

$5/MMBtu

$10/MMBtu

$15/MMBtu

Break-even Natural Gas Prices for Select Ice-bound Communities Given FY2010 & 2012 Diesel Costs

$3.82; Average price, FY2010-FY2012

Breakeven Range

2010 Diesel

2012 Diesel

Some takeaways

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Economies of scope and scale matter • Project must aggregate larger (and industrial) loads to start • Economics for smaller loads in ice-free communities may work, but

larger-project must first be commercially assembled Efficiency of use matters; scale can sometimes overcome • Economics for ice-bound communities are challenged • Ice-bound communities with larger demand (e.g. Dillingham) may

get enough economies of scale from bulk (non-ISO) storage Reasonable to expect: • Unalaska/Dutch – Dillingham – Naknek bulk (non-ISO) project

• ISOs for proximal communities may follow • SE ISO project with PCE utility needs met by ISOs will need:

• SE industrial anchor tenant(s), or • Backhaul from Unalaska

ACEP Focus Areas

Community Energy Solutions

Powering the Economy

The EnergyField of the Future

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ACEP is an honest broker (and developer) of information to help clarify choices and assist with decision making related to energy technologies and options

ACEP Focus Areas

Testing & optimization

IP Development

Analysis and Planning

Student involvement

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Both in the laboratory and in the field Recent lab-based examples include: Electratherm, Sustainable Automation grid-forming inverter, Prudent Energy flow battery, Williams flywheel (next up)

Testing and System Optimization

ACEP Energy Technology Lab (L) and Premium Power Installation in Kotzebue (R)

Using Organic Rankine Cycle technology for waste heat recovery

Example: Geothermal Industrial Process Energy

Electratherm 50kW ORC System

Pratt & Whitney 280 kW ORC System

Electratherm testing at UAF

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Development of IP with Alaska applications ACEP has developed a device to divert

surface debris from a surface deployed hydrokinetic device

Development of IP with Alaska applications

‘As a developer, I can speak directly to ACEP’s highly relevant and critical research to support our industry. (Over the past couple of years) I have watched this organization systematically identify barriers to deployment of these devices, then conduct research to see if those barriers can be mitigated.’ - Doug Johnson, Ocean Renewable Power Company

ACEP has compiled data and completed technical evaluations of operating systems statewide – these reports have been downloaded and used extensively. ACEP has also collected data statewide to update our understanding of heat flow. In collaboration with: AEA, the Denali Commission, CCHRC, the Seward Sealife Center, and Southern Methodist University.

Technology Analysis: Ground and Seawater Source Heat Pumps

In 2011, ACEP completed a comprehensive report on the potential for using small modular reactor technology for Alaska. We continue to track this technology, and are sending 3 UAF graduate students to Idaho National Lab to participate in the design of a 1MW system for space applications. In collaboration with ISER (UAA).

Technology Analysis: Small Modular Nuclear Reactors

Proposed Toshiba 4S reactor (10MW, proposed for Galena)

ACEP Projects are Statewide Islanded electric grid integration River hydrokinetics Low temperature geothermal Remote sensing/thermal imaging Waste heat utilization Coal-to-liquids technology Biomass energy Transmission and distribution Fuel additives assessment Small modular nuclear reactors Advanced energy storage Ground source and seawater source heat pumps Stranded renewable resources assessment Waves resource assessment

ACEP been involved in multiple aspects of assessing geothermal energy as an option for Nome, including an extensive resource assessment, economic analysis, fuel pricing, and integration with existing generation sources. In collaboration with: AEA, US DOE, Unaatuq, BSNC, NSEDC, the City of Nome and NJUS, SNC, WMNC, TNC, MINC, USGS

Example: Geothermal Energy for Nome

Clockwise from left: ACEP shallow drilling program; confirmation drilling program in 2013, community meeting in Teller; thermal mapping of region.

Nome has been purchasing power from BSNC via a power purchase agreement for several years and is in the process of entering into a second PPA with a subsidiary of Potelco, Inc for the possible development of a geothermal project. If developed, as much as $40M in private financing could be invested in energy infrastructure to serve Nome, and to provide a substantial portion of the utilities’ base load needs.

Project Financing- A Role for Independent Power Producers – Lessons from Nome

Above: Binary power plant at Chena Hot Springs. Right: Two turbines from BSNC wind farm at Banner Peak in Nome. Note

turbine repairs to tip breaks taking place in winter conditions.

Thoughts on Proposed Rural Energy Capital Energy Fund (HB 277/SB 138)

Initial Analysis by AEA would entail:

1) Develop a plan for developing infrastructure to deliver more affordable energy to areas of the state that are not expected to have direct access to a North Slope natural gas pipeline.

2) Recommend a plan for funding the design, development, and construction of the required infrastructure, and may identify a source of rent, royalty, income, or tax received by the state that may be appropriated by the legislature to implement the plan.

3) Provide the plan and suggested legislation for the design, development, construction, and financing of the required infrastructure to the legislature before January 1, 2017.

Alaska Center for Energy and Power VISION: Alaska leading the way in innovative

production, distribution, and management of energy

Alaska Center for Energy and Power VISION: Alaska leading the way in innovative

production, distribution, and management of energy

What does this mean?

We are maximizing production of our oil and gas resources

We are developing local resources wherever practical

We are using innovative financing mechanisms to incentivize private sector investment in Alaskan project

Diesel-off is common place in our rural communities

Experience gained by solving Alaska’s energy challenges is exported (knowledge-based economy)

Iceland – World leader in geothermal energy

Reykjavik – district heating with geothermal

First Organic Rankine Cycle power plant using geothermal energy in the world operated at Manley Hot Springs in 1980.

Fjardaál Aluminum Smelter

Kárahnjúkar Hydropower Plant

Blue Lagoon

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Creating opportunities at home & abroad

Over 80 companies involved in geothermal industry (exploration, development)

Provides free education to students from countries with undeveloped geothermal potential

Pipeline for business opportunities for Icelandic businesses in emerging markets

High quality jobs, energy sector significant contributor to GDP

Supporting Statewide Economic Development: Alaska’s comparative advantages

High contribution renewables

Difficult to extract/transport fossil fuels

Value added processing

Niche technologies (low temp geothermal, hydrokinetics)

Funding Energy Research is a Critical Component to a Healthy Business Ecosystem

Emerging Energy Technology Grant Fund – funding pilot and demonstration projects

University-based research in energy (including support for extractive industries) – creating value

Example from Texas – sustainably funded research through STARR program

Gwen Holdmann Director, Alaska Center for Energy & Power University of Alaska Tel: (907) 474-5402 E-mail: [email protected]

For more information contact:

www.uaf.edu/acep